Super fund members who receive advice from their fund are twice as likely to make additional contributions and have higher overall average contributions.
Jo-Anne Bloch, Mercer’s financial advice business leader, yesterday told the Financial Services Council conference that the financial advice revolution is well underway in the superannuation sector.
“Mercer’s analysis of member activity shows that individuals who access simple advice are more likely to take subsequent steps to boost their retirement savings,” she said.
“Our findings prove what we know intuitively: when members are shown the benefits of advice that they can understand and that is relevant to their needs, they are much more likely to take positive steps to boost their savings and protect their wealth.”
Mercer tracks members’ activity after they receive general or limited advice in the workplace or over the phone, and compares this to a group of members with similar characteristics who have not accessed advice.
Analysis of the data reveals that members who access limited or general advice are:
- twice as likely to make additional contributions and have higher average contributions;
- twice as likely to make a beneficiary update;
- five times more likely to make an insurance underwriting enquiry; and
- three times more likely to make an investment switch (noting that often the advice given is to recommend not switching).
Bloch said demand for advice from a range of Mercer channels continues to be strong, with its phone advice channel experiencing a 27 per cent increase in the number of ‘statements of advice’ provided, since the same time last year.
“In 2011 Mercer provided general and simple personal advice to 20,000 members in the workplace and over the phone. To increase the scope of this advice and make it easier for members to access, we have broadened our offering this year by providing simple advice in members’ workplaces,” she said.
